Williams-Sonoma Inc (WSM)
Liquidity ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Current ratio | 1.44 | 1.45 | 1.45 | 1.24 | 1.24 |
| Quick ratio | 0.63 | 0.67 | 0.74 | 0.22 | 0.30 |
| Cash ratio | 0.63 | 0.67 | 0.67 | 0.22 | 0.22 |
Williams-Sonoma Inc's liquidity ratios have shown some fluctuations over the past few years. Starting with the current ratio, it has remained relatively stable around 1.2 to 1.4, indicating that the company has sufficient current assets to cover its current liabilities. This suggests a moderate level of liquidity.
Moving on to the quick ratio, we see more variability. The quick ratio has ranged from 0.22 to 0.74 during the period under review. It is worth noting that a quick ratio below 1 may indicate some challenges in meeting immediate short-term obligations without relying on inventory sales. However, the quick ratio has generally improved over time, which is a positive trend.
Lastly, the cash ratio has also displayed a similar pattern to the quick ratio, with values ranging from 0.22 to 0.67. The cash ratio signifies the company's ability to meet liabilities using only its cash and cash equivalents. Ideally, a higher cash ratio indicates a stronger ability to cover short-term obligations without the need to liquidate other assets.
Overall, while there have been fluctuations in the quick and cash ratios, Williams-Sonoma Inc's liquidity position appears to be reasonable, with the current ratio consistently above 1, providing some comfort regarding its ability to meet short-term obligations.
See also:
Additional liquidity measure
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 117.78 | 102.30 | 117.79 | 106.37 | 163.42 |
The cash conversion cycle of Williams-Sonoma Inc has shown fluctuations over the past few years. In January 2023, the company's cash conversion cycle was 163.42 days, indicating a relatively long period for converting its investments in inventory and receivables into cash. By January 2024, the cycle decreased to 117.79 days, suggesting improvements in the company's efficiency in managing its working capital. However, there was a slight increase in the cash conversion cycle by January 2025 to 117.78 days.
Overall, Williams-Sonoma Inc should continue to monitor its cash conversion cycle closely to ensure that it efficiently manages its cash flow, inventory, and receivables to maintain profitability and liquidity.